FORT MCMURRAY/LAC LA BICHE, Alberta (Reuters) - Reconstructing Fort McMurray will be easier than first feared since much of the city's critical infrastructure remains intact but the once booming oil town will be smaller than before, according to its mayor.

The first priority is getting new temporary housing so companies can resume shuttered oil production.

Fort McMurray Mayor Melissa Blake said the fire is a chance to "right size" the city after the energy slump left it with vacant houses and unemployed workers well before wildfires hit last week.

With 10 percent of the city burned and more than 90,000 residents evacuated, the combination of a glut of prefire homes and quick-build housing are a solution as the government and oil executives try to jump-start rebuilding.

"If I look at what the circumstance gives to us, I think it's an opportunity to right-size the community," Blake told Reuters. "I recognize that this horror is probably going to get some people reconsidering what their futures are, whether it's in the region or not."

The wildfires glow underneath The Northern Lights, also known as the Aurora Borealis, near Fort McMurray, Alberta, Canada, May 7, 2016. REUTERS/Mark Blinch TPX IMAGES OF THE DAY

Smoke and flames from the wildfires erupt behind a car on the highway near Fort McMurray, Alberta, Canada, May 7, 2016. REUTERS/Mark Blinch TPX IMAGES OF THE DAY

Two RCMP police officers wear gas masks in the smoke from the wildfires near Fort McMurray, Alberta, Canada, May 6, 2016. REUTERS/Mark Blinch

People wait at a roadblock as smoke rises from wildfires near Fort McMurray, Alberta, Canada, May 6, 2016. REUTERS/Chris Wattie TPX IMAGES OF THE DAY

Smoke rises from the wildfire burning near Fort McMurray, Alberta, Canada, in this image from British astronaut Tim Peake aboard the International Space Station May 6, 2016. REUTERS/European Space Agency/Tim Peake via social media/Handout via Reuters THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. IT IS DISTRIBUTED, EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTS. FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS

A massive wildfire, which caused a mandatory evacuation, rages south of Fort McMurray near Anzac, Alberta, Canada May 4, 2016. . Chris Schwarz/Government of Alberta/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY. FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS. THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. IT IS DISTRIBUTED, EXACTLY AS RECEIVED BY REUTERS, AS A SERVICE TO CLIENTS

A flock of birds fly as smoke billows from the Fort McMurray wildfires in Kinosis, Alberta, Canada, May 5, 2016. REUTERS/Mark Blinch

A Canadian Joint Operations Command aerial photo shows wildfires in Fort McMurray, Alberta, Canada in this image posted on twitter May 5, 2016. Courtesy CF Operations/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY. NO RESALES. NO ARCHIVE

FORT MCMURRAY, AB - MAY 08: Smoke fills the air as a police officer stands guard at a roadblock along Highway 63 leading into Fort McMurray on May 8, 2016 near Fort McMurray, Alberta, Canada. Wildfires, which are still burning out of control, have forced the evacuation of more than 80,000 residents from the town. (Photo by Scott Olson/Getty Images)

FORT MCMURRAY, AB - MAY 07: Smoke from wildfires drifts across the night sky on May 7, 2016 near Fort McMurray, Alberta, Canada. Wildfires, which are still burning out of control, have forced the evacuation of more than 80,000 residents from the town. (Photo by Scott Olson/Getty Images)

A wildfire burns on Highway 63 south of Fort McMurray, Alberta, Canada, on Saturday, May 7, 2016. Wildfires raging through Alberta have spread to the main oil-sands facilities north of Fort McMurray, knocking out an estimated 1 million barrels of production from Canada's energy hub. Fire officials say the out-of-control inferno may keep burning for months without significant rainfall. Photographer: Darryl Dyck/Bloomberg via Getty Images

A huge plume of smoke from wildfires burning rises over Fort McMurray in this aerial photograph taken in Alberta, Canada, on Friday, May 6, 2016. The wildfires ravaging Canada's oil hub in northern Alberta have rapidly spread to an area bigger than New York city, prompting the air lift of more than 8,000 evacuees as firefighters seek to salvage critical infrastructure. Photographer: Darryl Dyck/Bloomberg via Getty Images

Smoke and flames can be seen along the highway near Fort McMurray, Alberta on May 6, 2016.
Canadian police led convoys of cars through the burning ghost town of Fort McMurray Friday in a risky operation to get people to safety far to the south.In the latest chapter of the drama triggered by monster fires in Alberta's oil sands region, the convoys of 50 cars at a time are driving through the city at about 50-60 kilometers per hour (30-40 miles per hour) TV footage showed.
/ AFP / Cole Burston (Photo credit should read COLE BURSTON/AFP/Getty Images)

A Canadian Joint Operations Command aerial photo shows wildfires near neighborhoods in Fort McMurray, Alberta, Canada in this image posted on twitter May 5, 2016. Courtesy CF Operations/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY

FORT MCMURRAY, AB - MAY 06: The remains of a charred bicycle sits in a residential neighborhood on May 6, 2016 in Fort McMurray, Alberta, Canada Wildfires, which are still burning out of control, have forced the evacuation of more than 80,000 residents from the town. (Photo by Scott Olson/Getty Images)

ALBERTA, CANADA - MAY 05: (EDITORIAL USE ONLY) Aerial view of highway 63 south of Fort McMurray taken from a CH-146 Griffon helicopter on May 5, 2016. The Canadian Armed Forces have air assets deployed in support of the Province of Alberta's wildfire emergency response efforts. (Photo by MCpl VanPutten / Department of National Defence in Canada / Handout/Anadolu Agency/Getty Images)

FORT MCMURRAY, AB - MAY 06: A swing set with the swings burned away sits in a residential neighborhood destroyed by a wildfire on May 6, 2016 in Fort McMurray, Alberta, Canada Wildfires, which are still burning out of control, have forced the evacuation of more than 80,000 residents from the town. (Photo by Scott Olson/Getty Images)

FORT MCMURRAY, AB - MAY 06: Home foundations and shells of vehicles are nearly all that remain in a residential neighborhood destroyed by a wildfire on May 6, 2016 in Fort McMurray, Alberta, Canada Wildfires, which are still burning out of control, have forced the evacuation of more than 80,000 residents from the town. (Photo by Scott Olson/Getty Images)

VERMILLION PASS, CANADA - APRIL 26: A forest in the Kootenay National Park destroyed by fire is viewed on April 26, 2016 at Vermillion Pass, Alberta, Canada. Kootenay National Park borders Banff Nationa Park and features glaciers, hot springs, lakes, waterfalls, and snowcapped mountains. (Photo by George Rose/Getty Images)

A convoy of cars sporadically heads South down Highway 63 after being stranded at a work camp north of Fort McMurray, Alberta on May 6, 2016.
Canada on May 5, 2016 began airlifting to safety up to 25,000 people from the city of Fort McMurray forced from their homes by raging forest fires in Alberta's oil sands region.The authorities ordered the oil city of 100,000 people to be evacuated after firefighters backed by air tankers and helicopters failed to prevent the monster blaze from engulfing entire neighborhoods. / AFP / Cole Burston (Photo credit should read COLE BURSTON/AFP/Getty Images)

A woman picks through donated clothing and goods at a makeshift evacuee center in Lac la Biche, Alberta on May 5, 2016, after fleeing forest fires north of Fort McMurray.
Raging wildfires pressed in on the Canadian oil city of Fort McMurray Thursday after more than 80,000 people were forced to flee, abandoning fire-gutted neighborhoods in a chaotic evacuation. No casualties have been reported from the monster blaze, which swept across Alberta's oil sands region driven by strong winds and hot, dry weather.
/ AFP / Cole Burston (Photo credit should read COLE BURSTON/AFP/Getty Images)

Exhausted and now living out of his truck, Fort McMurray resident Thomis Jonasson fills his vehicle with gas before heading towards Lac La Biche after evacuating his city of 62,000 due to raging wildfires on May 3, 2016. REUTERS/Topher Seguin

Ron Laybolt calls family from a parking lot in Conklin, Alta. after Fort McMurray, a city of 62,000, was evacuated due to raging wildfires on May 3, 2016. REUTERS/Topher Seguin

Wendy Tremblay, resident of Conklin, Alta., prepares cots for residents of Fort McMurray as they prepare to assemble in Conklin, Alta. after their city of 62,000 was evacuated due to raging wildfires on May 3, 2016. REUTERS/Topher Seguin

Fort McMurray resident Crystal Maltais buckles in her daughter, Mckennah Stapley, as they prepare to leave Conklin, Alberta, for Lac La Biche after evacuating their home in Fort McMurray on Tuesday May 3, 2016. REUTERS/Topher Seguin

Up Next

See Gallery

Discover More Like This

of

SEE ALL

BACK TO SLIDE

SHOW CAPTION
+

HIDE CAPTION
–

The fire may have been the final push that some residents needed to leave the isolated northern city, but major oil producers need it back on its feet quickly to restart some 1 million barrels per day of shuttered production.

The wildfire, which has spread over 229,000 hectares (566,000 acres), is still burning, though favorable weather overnight was seen helping firefighters.

While many companies have work camps at the site of their oil sands projects around Fort McMurray, workers from across Canada and around the world moved into the city with their families when the sector was booming years ago.

If energy companies can't house workers and their families quickly, they risk losing them permanently.

The industry will support efforts to rebuild the hospital, pipelines and electrical distribution center, Suncor Inc <SU.TO> Chief Executive Officer Steve Williams said on Tuesday after a meeting of industry and provincial officials.

"FIRST WAVE"

A recovery will be easier due to the city's largely intact infrastructure and downtown, but people are already fighting over available housing because several major residential neighborhoods were destroyed.

"We've got banks, companies, restoration companies, engineering companies all looking for space now. People need to stay somewhere," said Bill de Silva, construction manager of Liam Construction, one of the city's biggest builders.

He said the "first wave" is already trying to secure space in hotels, condominiums and apartments undamaged by the fire, but the approval process in the still-evacuated city isn't easy.

"We've got to get there as quickly as we can. We can play a big role but they have to let us in. All the government red tape doesn't help us now," de Silva said.

Alberta Premier Rachel Notley said officials need to finish damage assessments, set up a welcome center and transportation plan and secure food and supplies before anyone can start moving back in.

"There are hazardous materials and broken power lines. Basic services, gas, water, waste disposal, healthcare and much more needs to be re-established," she said.

"The city was surrounded by an ocean of fire only a few days ago but Fort McMurray and the surrounding communities have been saved, and they will be rebuilt."

The province is already speaking to temporary builders.

"They've been asking very general questions about what kind of temporary housing solutions we can provide (and a) rough timeline of how long it would take to be installed," said Troy Ferguson, CEO of Redrock Group, which builds modular work camps and homes in Alberta.

Marc Roy, who was chief of staff for the U.S. Federal Emergency Management Agency in Louisiana in the aftermath of Hurricane Katrina, sees parallels between the two disasters, including the total destruction of some homes.

"Are you building with the hopes that you build a field of dreams and people come to fill it, or are you using your resources as wisely as you possibly can at the moment?" he said. "You just can't put it back exactly like it was and make that your plan. That does not work."

One wrinkle may be home insurance policies that do no pay out in full unless homeowners rebuild.

"If a customer chooses not to repair or replace, they will receive the actual cash value of the building at the time of the loss," said Intact Insurance, Canada's largest property and casualty insurer, in a statement. Because of the oil downturn, that cash value could be less than owners hope.

Debra Bunston, an Alberta realtor, said the disaster may fill vacant homes or spur sales of homes that are already on the market, "a bit of a silver lining in this horrible cloud of smoke."